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CORRESP
1
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MEMORANDUM

DATE:
April
19, 2005

RE:
Northland
Cranberries, Inc.
Form 10-K, filed November 29, 2004

Form 10-Q, filed January 14, 2005
File No. 000-16130

        This
memorandum sets forth the response of Northland Cranberries, Inc. (the
“Company”) to the letter of the Staff (the “Staff”) of the Securities
and Exchange Commission (the “Commission”), dated April 5, 2005, with respect to
the above-referenced Form 10-K and Form 10-Q. The numbered items set forth below repeat
(in bold italics) the comments of the Staff reflected in its letter, and following such
comments are the responses (in regular type) of the Company.

        As
discussed with the Staff in a teleconference on April 14, 2005, this memorandum also
describes the amendment made by the Company to its Form 10-Q for the quarterly period
ending November 30, 2004. The amendment was made for the purpose of reporting the
correction of an error in the Company’s previously issued financial statements which
is unrelated to the comments of the Staff.

I.
 Responses
to Staff Comments.

Management’s
Discussion and Analysis, page 16

        Results
of Operations

        1.    As
you know, under Instruction 3 to Paragraph           303(a) of Regulation S-K, you are
required to address material events and           uncertainties that would cause your
reported financial information not to be           necessarily indicative of future
operating results. We understand from your           disclosure on page 47 that you
entered into an agreement providing Ocean Spray           with an option to purchase up
to 14 of your 17 cranberry marshes in exchange for           $47.5 million. Please
disclose the extent to which your historical operating           results is attributable
to production from marshes that were owned by you,           compared to those owned by
third parties from whom you purchased cranberries, to           convey the significance
of your decision to make the marshes available for sale.           It should be clear
from your discussion how your ability to produce will be           impacted by your
decision to sell your cranberry marshes.

        Background.          As
previously disclosed in the Company’s Annual Report on Form 10-K for the
          fiscal year ended August 31, 2004 filed with the Commission on November 29,
          2004, the Company entered into agreements with Ocean Spray Cranberries, Inc.
          (“Ocean Spray”) on September 23, 2004, pursuant to which (i) the
          Company sold its processing plant, storage facility and certain offices located
          in Wisconsin Rapids to Ocean Spray for approximately $28 million, subject to
          certain adjustments and including a $2.5 million escrow; (ii) Ocean Spray paid
a           non-refundable (but creditable) $5.0 million cash fee in exchange for the
option           to purchase up to 14 of the Company’s 17 cranberry marshes at
prices that           aggregate $47.5 million (before the option fee); (iii) the Company
agreed, for a           period of 10 years, to deliver all of the cranberries harvested
from its           currently-owned marshes and contract growers’ marshes to Ocean
Spray, which           Ocean Spray will receive, clean, bin, store and process into juice
concentrate           for a fixed fee; and (iv) Ocean Spray agreed, for a period of ten
years, to           purchase cranberry concentrate not otherwise used by the Company in
its branded           products.

        As
previously disclosed in the Company’s Current Report on Form 8-K dated and filed
with the Commission on March 23, 2005 and the Company’s Quarterly Report Form 10-Q
for the quarter ended February 28, 2005 filed with the Commission on April 14, 2005 (the
“Second Quarter Form 10-Q”), the Company received notice from Ocean Spray that
it had assigned to four of its cranberry producing members its rights to receive title to
ten of the 14 cranberry marshes subject to the option agreement entered into between the
Company and Ocean Spray in September 2004. Between March 18 and March 22, 2005, the
Company received executed Agricultural Asset Purchase Agreements from JJW Cranberries,
LLC, Wayne Gardner d/b/a Dawesville Cranberry Co., James Potter Cranberry Marsh, Inc. and
Acorn Acres Cranberry Co., Inc. relating to the purchase of an aggregate of nine of those
14 marshes (the option was not exercised with respect to the tenth marsh for which notice
of assignment was received from Ocean Spray). Between March 23 and March 29, 2005, the
Company countersigned those agreements and they became effective. The Company expects to
consummate the marsh sales in May 2005.

        Upon
consummation of the marsh sales, the Company’s business will consist primarily of:
(i) growing cranberries at its remaining eight marshes and delivering those cranberries
to Ocean Spray for processing into cranberry juice concentrate pursuant to the toll
processing agreement between the Company and Ocean Spray; (ii) purchasing cranberries
from its 44 contract growers and delivering those cranberries to Ocean Spray for
processing into cranberry juice concentrate pursuant to the toll processing agreement
between the Company and Ocean Spray; (iii) selling cranberry juice concentrate to Apple
& Eve, LLC (“Apple & Eve”) pursuant to the Company’s supply
agreement with Apple & Eve1; (iv) selling to Ocean Spray pursuant to the
toll processing agreement between the Company and Ocean Spray all cranberry juice
concentrate not otherwise sold by the Company to Apple & Eve.

        Response.          The
Company did not believe that any potential exercise of some or all of the           marsh
options would have materially impacted the level of revenues and profits
          generated by the cranberries harvested from those optioned marshes in fiscal
          2005. Since the option could not be exercised by Ocean Spray prior to December
          1, 2004, by the time of any exercise the cranberries harvested in the fall of
          2004 from all of the 14 marshes would already be (or contractually subject to
          be) processed into cranberry concentrate pursuant to the toll processing
          agreement with Ocean Spray. This concentrate would have been either utilized by
          the Company in the manufacture of its branded juice products or otherwise sold
          to Ocean Spray pursuant to the toll processing agreement. In addition, although
          the 14 marshes that were subject to the option agreement accounted for
          approximately 90% of the cranberries harvested by the Company from its owned
          marshes during fiscal 2005 and approximately 44% of the total cranberries
          harvested during fiscal 2005 from the Company’s owned and contracted
          marshes on a combined basis, the Company believed the annual supply of
          cranberries to be produced from its three marshes which were not subject to the
          option agreement combined with cranberries purchased from the Company’s 44
          contract growers would have been sufficient to continue to support the
          Company’s branded juice business, including reasonably foreseeable growth,
          during fiscal 2006 and subsequent years. As a result, the Company did not
          believe that any potential exercise of the marsh options would impact its
          ability to produce product for its branded juice business.

        1
As previously disclosed in the Company’s Current Report on Form 8-K filed with the
Commission on February 28, 2005, the Company sold its branded juice business to Apple
& Eve on February 22, 2005. In connection with the sale of the branded juice business,
the Company and Apple & Eve also entered into a Concentrate Purchase and Supply
Agreement pursuant to which Apple & Eve committed to purchase the Company’s then
existing inventory of the cranberry concentrate. In addition, for the period beginning on
October 1, 2005 and ending on the earlier of September 30, 2014 or the termination of the
Company’s toll processing agreement with Ocean Spray, Apple & Eve has the option
in each year to purchase on a monthly basis up to the total amount of cranberry juice
concentrate available to the Company under its toll processing agreement with Ocean Spray
at a price that does not exceed the price at which the Company can sell cranberry juice
concentrate to Ocean Spray under the toll processing agreement.

2

        The
Company believes the primary impact on results of operations from any potential exercise
of the marsh options would be felt only in fiscal 2006 and beyond, and would be apparent
through reduced sales of cranberry concentrate to Ocean Spray pursuant to the toll
processing agreement (since the cranberries harvested from marshes sold by the Company
would no longer be owned by the Company and subject to sale by the Company to Ocean Spray
pursuant to that agreement). However, at the time of preparation and filing of the
Company’s Annual Report on Form 10-K filed with the Commission on November 29, 2004,
the Company’s disclosures regarding the potential impacts of the marsh sales were
necessarily limited, primarily because it was uncertain whether Ocean Spray would exercise
its option, if at all, as to some or all of the marshes subject to the option agreement.
As discussed above, subsequent to the filing of the Annual Report on Form 10-K, the marsh
options were exercised with respect to nine of the 14 marshes. As a result, the Company is
currently better able to quantify and disclose the potential impacts to its results of
operations, and did so in the Second Quarter Form 10-Q. The language below is excerpted
from “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” contained in the Second Quarter Form 10-Q:

“The
cranberries we harvested in the fall of 2004 (fiscal 2005) from the nine marshes to be
sold to assignees of Ocean Spray accounted for approximately 53% of the total fiscal 2005
harvest from our owned marshes and approximately 27% of the total fiscal 2005 harvest from
our owned and contracted marshes on a combined basis. Since the cranberries harvested in
the fall of 2004 from the nine marshes to be sold to assignees of Ocean Spray have already
been processed and either sold or committed to be sold, the revenues and profits from the
sale of those cranberries will be recorded in fiscal 2005. As a result, assuming market
prices for cranberry concentrate remain stable, we do not expect our revenues and profits
from the sale of cranberry concentrate to materially change in fiscal 2005 as a result of
the sale of the nine marshes. However, commencing in fiscal 2006, and assuming aggregate
harvest levels remain relatively constant, we expect to harvest approximately 50% fewer
cranberries from our owned marshes (approximately 25% fewer cranberries when giving effect
to cranberries purchased from our contract growers) than we did in fiscal 2005. Assuming
market prices for cranberry concentrate remain stable, we believe this reduction in
cranberries harvested will result in a reduction in revenue from the sale of cranberry
concentrate of approximately 25% for fiscal 2006 compared to anticipated fiscal 2005
levels, and a comparable reduction in operating profits.”

3

        The
Company believes the foregoing disclosure in the Second Quarter Form 10-Q adequately
informs the public regarding how the Company’s historical operating results are
attributable to production from marshes that were owned by the Company, compared to those
owned by third parties, and how the Company’s ability to produce will be impacted by
the marsh sales.

        2.    We
note your disclosures on page 11, identifying various sales of           facilities that
occurred in 2004 and 2003. Please expand your disclosures in           MD&A to
address the extent to which your dispositions have impacted the           comparability
of your results of operations and cash flows, or which have           otherwise effected
the indicative value of your reported financial information.           The impact on your
production capacity, sales volume, cost of sales, and cash           flows from
operations should be clear.

        The
disposition of facilities in 2003 and 2004 did not have a material impact on the
comparability of the Company’s results of operations, cash flows (except, as
previously reported, to the extent of proceeds received from such dispositions),
production capacity, sales volume or cost of sales for the fiscal year ended August 31,
2004 or the quarterly period ended November 30, 2004. This is primarily because, as
further discussed below, (i) the Company previously ceased production at the facility,
(ii) where the facility was used for production, the facility was underutilized, and/or
(ii) the services performed at the facility were transferred to third party providers or
other owned facilities on cost terms relatively comparable to the Company’s
historical costs of production.

        For
example, although the Company sold its 172,000 square foot receiving, packaging and
concentrating facility located in Wisconsin Rapids to Ocean Spray in September 2004
(fiscal 2005), the Company simultaneously entered into a toll processing agreement with
Ocean Spray for a period of ten years pursuant to which Ocean Spray will provide to the
Company all of the receiving, packaging and concentrating services previously performed by
the Company at the facility. The fees for these services are fixed for the term of the
toll processing agreement and are based on the Company’s average historical costs to
provide such services. As a result, the impact of this sale on the Company’s
production capacity, sales volume, cost of sales, and cash flows from operations will not
be material in future periods.

        Also,
during fiscal 2004, the Company sold its former production and warehouse facility located
in Bridgeton, New Jersey. As previously disclosed, the Company ceased production and
closed the facility in November 2000. As a result, the disposition of the facility had no
impact on cost of sales, nor did it impact production capacity since all production had
previously been absorbed at other owned facilities or outsourced to third party providers.
In addition, the carrying costs associated with the facility were included within selling,
general and administrative costs and were less than one percent of net revenue in both
fiscal years 2003 and 2004. These costs approximate the impact on cash flows from
operations related to the facility. Although the Company leased a portion of the facility
to a third party at the time of sale in fiscal 2004, revenue from the lease represented
less than one percent of the Company’s total net revenue in each of fiscal years 2003
and 2004.

4

        During
fiscal 2004, the Company also sold its former bottling plant and production facility
located in Dundee, New York. As previously disclosed, the Company ceased production and
closed the facility in June 2002. The facility had been underutilized at the time and most
production was transferred to the Company’s facility located in Jackson, Wisconsin.
The Company estimates that the closure of the Dundee facility reduced costs of sales by
approximately $750,000, or one percent, during fiscal 2003. In addition, the carrying
costs associated with the facility were included within selling, general and
administrative costs and were less than one percent of net revenue in both fiscal years
2003 and 2004. These costs approximate the impact on cash flows from operations related to
the facility. The Company did not lease the facility in fiscal years 2003 or 2004 and,
accordingly, the sale of the facility had no impact on the Company’s net revenue
during those periods.

        The
Company sold its former bottling facility located in Jackson, Wisconsin during fiscal
2004. The Company ceased production